Entertainment

Netflix Loses Viacom and a Key Demographic: Toddlers

Like many parents with young children, my wife and I think Netflix is a godsend. While its streaming service has never been a good place to find current, high-quality titles, that $7.99 a month gets you truckloads of kids entertainment, including hits from Nickelodeon such as Dora the Explorer to SpongeBob SquarePants.

At least it did up until this weekend. Following the loss of almost 2,000 titles from its catalog a month ago, Netflix's contract with Viacom (which owns Nickelodeon) didn't get renewed, and a few days ago the consequences of the breakup hit its library. For myself and millions of other Netflix subscribers, all of Nick's titles — including the two popular ones I mentioned earlier as well as a host of others — abruptly disappeared.

Netflix's decision is tied directly to its new strategy of being an "expert programmer" and curator instead of a broad distributor of entertainment. It's a decision made out of necessity rather than preference, since the studios have a love/hate relationship with service, and will likely never make more than a few select, current titles available to Netflix's subscriber service.

Nonetheless, the curation approach has a lot of potential. Rather than seeing its streaming service as the online equivalent of a video store, Netflix is positioning itself to compete more directly with the likes of HBO — exemplified by its highly regarded series House of Cards.

Going forward, Netflix will put more emphasis on the quality of its catalog rather than the quantity.

It's good for the brand: As anyone with a Netflix subscription knows, the selection of movies available has historically been on par with your local drugstore's discount rack. Netflix isn't planning on leaving kids behind, either: As the Nickelodeon deal expired, it put the final touches on a new contract with Disney that introduces five titles, including Jake and the Neverland Pirates and Tron: Uprising, to the service. That's definitely progress toward its "curator" goal.

It also happens to be the wrong strategy, at least for the toddler demographic. Like many new parents, I often turn to Netflix to keep my three-year-old son occupied for a little while when necessary. When I do, I'm not looking for marquee titles with high production values — I just want something peaceful (and possibly even educational) that he likes. Young children can be picky, but if you have access to Nickelodeon's entire catalog, chances are you're going to find something they'll enjoy.

And I did. Thanks to Netflix, my son became a huge fan of Blue's Clues. He'd be very engaged while watching, laughing and talking to the screen often. Then, a few days ago, the show disappeared from Netflix with no explanation. A quick Google search told me about the expired Viacom contract, but such grown-up matters are alien to a three-year-old.

I'm sure there are a lot of parents out there with young children equally attached to Dora, SpongeBob or any other Nick show. And that's why Netflix's curator approach doesn't work for us. Young kids don't know what they want — they need to be shown several options before settling on one.

There's another distributor of digital entertainment that's doing kid's content right, though, and that's Amazon. The company rolled out FreeTime Unlimited — an all-you-can-eat approach to kids content that includes video, books and games — to Kindle Fire owners last year. The service offers a huge amount of "pre-curated" titles for a few bucks a month.

This is exactly what parents want from a subscription service. Not just a few titles that some programmer has deemed high quality, but a broad swath of age-appropriate material that kids can explore. Blue's Clues probably has some of the lowest production values of any show I've seen, but my son can't get enough of it.

A curation strategy makes sense for a sophisticated audience, and it's certainly been effective for HBO and Showtime. But there's a reason those services don't have breakout kids titles. Young children not only like different shows and movies than adults; they actually select their entertainment in a completely different way.

If Netflix doesn't want to lose toddlers — and, more to the point, their parents — it should rethink its approach for its littlest demographic. It needs to offer them a playground of content, not just a few "high quality" toys. Otherwise, more kids like my son will start learning to say "Amazon" when they want their shows.

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